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How to financially survive a shutdown

Ed Zurndorfer, registered employee benefit consultant

Strategies for living through a shutdown aren't all that different from your usual financial survival plans, according to registered employee benefit consultant, Ed Zurndorfer.

"You prepare for it like you always should be prepared for anything that may be...some life event may cause a significant distress on your life and here are some of my suggestions:"

"Any employee should always have a liquid savings account in which they have at least three to six months of their average expenses sitting in a very liquid account like a checking account, savings account, money market account. And this money is for that unforeseen emergency." The idea, said Zurndorfer, is that "the money will be there to pay the most immediate bills."

"They should communicate with their lenders such as mortgage companies, if they have a car loan talk to their lender, to tell them there's a possibility they may not be able to make the next month's or the following month's payment because they're not going to be getting a paycheck. It's very important that you communicate with your lenders because lenders do, in fact, have a heart and soul. And they're willing to allow you to make late payments, probably with some penalties, but the most important things is you let them know that you're not going to be able to make next month's payment. The worst thing you can do is just ignore it and say 'Well, when I get paid then I'll start paying my lender again,' because that's when things could get very, very nasty." He speaks from personal experience. As a federal employee in the shutdown of '95, he said he immediately contacted the school his children were attending to tell them there was a chance he wouldn't be able to make the next month's tuition payment. Zurndorfer said the school had no problem working with him and was well aware of the problem since so many of the parents were federal employees.

Zurndorfer said a lot of people "aren't going to like this," but if you know you're going to be furloughed for a few weeks or longer "you may have to go out and see if you can get a temporary job." He suggested that, given the time of year, you might be able to find temporary work at a local home improvement store, perhaps "selling lawn mowers and rakes" just to bring some money in.

Asked about borrowing from your TSP, he said he generally doesn't recommend it. "First of all," said Zurndorfer, "if the shutdown's going to be in two weeks, there's no way one will be able to get a loan in time to meet your expenses if the government is going to shutdown in two weeks. Also, I just don't believe in robbing someone's retirement account to pay for current expenses." And if borrowing from family members, said Zurndorfer, "I would be very careful because this could cause some real headaches later on."

Do NOT count on living off of your tax refund check anytime soon. "If you file your taxes between now and April 18th and let's say the IRS shuts down on March 18th after this two week extension of the budget and there is a furlough, your refund would not be processed. And if you're a federal employee, you're not going to be getting your refund which also, you're laid off yourself, you're not going to get that money to pay your bills. So that's another reason you should build up your liquid savings account: to anticipate having no money around to pay your bills."